Ste. Michelle Wine Estates, Railex LLC Innovate Wine Distribution in Washington

Woodinville, Wash.

Ste. Michelle Wine Estates, the Northwest’s oldest and most acclaimed wine company, and Railex LLC, a pioneer in transcontinental perishable distribution, are teaming up to create the first temperature-controlled rail-based system to transport wine efficiently and sustainably across the U.S.

The project’s cornerstone is a new Wine Services Distribution Center which will be built adjacent to Railex’s existing transload center in Wallula, Washington. Railex will invest $18-$20 million to build and operate the 500,000 square foot bonded wine storage and distribution center. It is scheduled to open February 2013.

Ste. Michelle has signed a long-term lease for the majority of the warehouse footprint and also will contract with Railex to transport its domestic and import wines throughout the U.S. This represents a significant expansion of the current work that Railex is managing on behalf of the wine company.

“Ste. Michelle is an expert at growing grapes and making wine,” said Rob McKinney, Vice President of Operations. “Although we have expertise with transportation and distribution issues, we determined that our business has grown to a scale that requires a third party logistics provider to manage our distribution requirements according to our exacting standards.”

The Railex Wine Services Distribution Center will offer refrigerated, humidity-controlled storage plus numerous efficiencies to manage inventory and transportation logistics to better respond to customer requests.

The company operates three, state-of-the art distribution facilities which are linked by a refrigerated perishable unit train that is the first to be marketed to the food and beverage industry. The Wallula, Delano (CA) and Rotterdam (NY) hubs will transfer finished goods from the heart of wine country to retailers nationwide or imported wines from an Eastern port to the warehouse in Wallula.

Railex guarantees five-day rail transit from both West Coast locations to New York. A Southeast location, which is planned to open in 2013, also will offer five-day rail transit from the West Coast.

“Railex is uniquely positioned to provide the highest level of customer service to SMWE, their employees and customer base,” said Jim Kleist, SVP of West Coast Operations for Railex.

“Our location in the heart of Washington wine country, the latest inventory control and warehouse management technologies and high speed refrigerated rail transportation will enable us to deliver wine quickly while maintaining the highest standards of quality.” Kleist said.

Railex also has been committed since its inception environmental sustainability. The company has worked with the U.S. Environmental Protection Agency to quantify its impact on the environment: since 2006, Railex has reduced diesel fuel consumption by 45 million gallons and CO2 emissions by 900,000 metric tons, as opposed to existing truck transportation.

“Railex has a proven business model for storing and shipping Pacific Northwest produce to East Coast markets by rail. Ste Michelle is the premier Pacific Northwest winery and its wine storage and distribution services make for a great partnership with Railex,” said Paul Schneidmiller, President of the Port of Walla Walla.

“The Port of Walla Walla is pleased to see a new large investment come to the Port’s Dodd Industrial Park. The Port over the last several months has worked closely with Railex to ensure that the required infrastructure is in place to accommodate a new wine distribution warehouse,” Schneidmiller said. “The Port with assistance from the State of Washington will be investing in public infrastructure. When completed, the wine distribution warehouse will create new jobs and a substantial new tax base for Walla Walla County.”

Railex LLC was founded in 2006 as a distribution platform that links manufacturers, shippers, retailers and distributors via consistent, fast and ‘green’ refrigerated transportation. The platform utilizes a hybrid of short-haul, consolidation/deconsolidation centers and an expedited refrigerated rail system.

Ste. Michelle Wine Estates, located outside of Seattle, Washington, has a long and distinguished history that dates back to 1934. Wines under the Ste. Michelle label were first introduced in 1967, and since that time the company has expanded its vineyard holdings to more than 3,700 acres in Washington and California. Today the Washington portfolio includes Chateau Ste. Michelle, Columbia Crest, Northstar, Spring Valley Vineyards, Col Solare, Domaine Ste. Michelle, Red Diamond, Snoqualmie and 14 Hands. The company also owns Stag’s Leap Wine Cellars (with Italy’s Antinori family), Conn Creek and Villa Mt. Eden in the Napa Valley of California, and Erath, in Dundee, Oregon. In 2006, Ste. Michelle Wine Estates became the exclusive U.S. importer for the acclaimed Antinori wine company of Italy and Chile’s Haras wines, for Champagne Nicolas Feuillatte of France in 2009 and for New Zealand’s Villa Maria Estate in 2010.

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For further information:
Kari Leitch
425-415-3673
kari.leitch@smwe.com